12.11.2026 11:12
CBRT Governor Fatih Karahan delivered the year’s final inflation report presentation. The CBRT revised its 2026 year-end inflation forecast from 28 percent to 29.5 percent, and its 2027 year-end inflation forecast from 15 percent to 21 percent.
The promotional meeting for the Inflation Report 2026-IV began with the participation of Fatih Karahan, Governor of the Central Bank of the Republic of Türkiye (CBRT). At the meeting, assessments regarding the inflation outlook, economic developments, and monetary policy were shared with the public.
INFLATION FORECASTS ANNOUNCED
Karahan, announcing the year's final inflation forecast, said, “We have revised our 2026 year-end inflation forecast upward to 29.5 percent. We expect inflation to decline to our intermediate targets of 21 percent at end-2027, 13.5 percent at end-2028, and 9 percent at end-2029, and then stabilize at the medium-term inflation target of 5 percent.”
At the previous Inflation Report meeting, Karahan had raised the 2026 year-end inflation forecast to 28 percent and announced that they expected inflation to decline to 15 percent at end-2027 and to 9 percent at end-2028.
“THE DECLINE IN INFLATION MAY STALL IN NOVEMBER”
Also touching on the latest inflation developments, Karahan said, “The disinflation process slowed due to supply-side pressures.” Drawing attention to the fact that energy prices were decisive in the course of inflation in 2026, Karahan used the expressions, “The decline in annual inflation may stall in November.”
Karahan stated that the main trend of inflation declined to 1.8 percent in the third quarter and maintained this level in October. He announced that the trend inflation indicator fell to 1.7 percent in October.
HE DREW ATTENTION TO THE INCREASE IN ENERGY PRICES
Evaluating the impact of geopolitical developments on energy prices, Karahan said that there was a significant rise in crude oil and natural gas prices in September and October.
Karahan said, “Supply-side shocks caused by geopolitical developments are limiting the decline in headline inflation. The continuation of this situation keeps upward risks to the inflation outlook alive and requires a cautious stance.”
Stating that if the increase in energy prices becomes permanent, indirect effects could also pose a risk to inflation, Karahan expressed that high energy prices continue to be effective on global inflation and expectations.
THE SLOWDOWN IN RENT INFLATION BECAME MORE PRONOUNCED
Stating that disinflation continued in the services sector, Karahan said they considered the slowdown, especially in items that had shown high price rigidity in the past, important. Expressing that the slowdown trend in rent inflation became more pronounced, Karahan noted that there were differences among sub-items of the services group.
Stating that food inflation declined with the improvement in supply conditions but continued its volatile course, Karahan announced that the slowdown in demand conditions supported disinflation in core goods.
CREDIT GROWTH DECLINED TO 20 PERCENT
Also speaking about developments in financial markets, Karahan reported that credit growth slowed recently and total credit growth declined to around 20 percent.
Announcing that the weighted average funding cost declined by a total of 400 basis points, Karahan stated that after developments in the funding market, money exiting funds largely shifted to deposits.
Karahan said that the total non-performing loan ratio was close to its historical average, and that they closely monitored non-performing loan data for individual loans.
LATEST SITUATION IN ECONOMIC GROWTH AND EXPORTS
Making assessments regarding economic activity, Karahan stated that growth slowed in the second quarter led by domestic demand, while in the third quarter services production increased and industrial production declined.
Stating that the capacity utilization rate remained below historical averages, Karahan said that despite difficulties in global trade and geopolitical conditions, exports showed a positive performance in the second and third quarters.
Stating that the overall outlook in tourism did not deteriorate despite the war, Karahan noted that energy imports rose due to geopolitical developments, while imports excluding gold and energy remained close to flat.
“WE WILL CONTINUE TIGHT MONETARY POLICY”
Emphasizing that the determined stance in monetary policy will continue, Karahan used the expressions, “We will maintain our tight monetary policy stance, which will ensure the continuation of disinflation and a decline in inflation in line with our intermediate targets.”
Stating that inflation expectations require maintaining a cautious stance, Karahan announced that they had taken additional measures to support financial stability. Karahan also said that volatility in gold prices and risk appetite was reflected in reserves.